Cabinet passes enabling GST laws
FM to table bills as money bills soon
Finance Minister Arun Jaitley. PTI File Photo.
These four legislations have been earlier approved by the GST Council over 12 meetings of the Council held in the last six months. The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods or services for both by the Centre. On the other hand, the IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods, or services, or both, by the Centre.
The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the union territories without legislature. UTGST is akin to states Goods and Services Tax (SGST) which shall be levied and collected by the states/union territories on intra-state supply of goods or services or both.
Loss of revenue
The Compensation Law provides for compensation to the states for loss of revenue arising on account of implementation of the goods and services tax for a period of five years.
“The government is committed to early introduction of GST, one of the biggest reforms, in the country as early as possible. The GST Council has decided July 1 as the date of commencement of the GST,” an official statement said after the Cabinet meeting.
After the four GST laws are passed by Parliament and the SGST is cleared by state legislatures, India’s one-nation, one-tax law will be technically ready for implementation. However, a major work on fitment of rates still remains to be done. Finance Minister Arun Jaitley has said that the fitment will begin immediately after the March 31, GST Council meeting which will pass the last bunch of rules required for the roll out.
Fitment of rates has to be done in the slabs decided earlier — they are 5%, 12%, 18% and 28%. Additionally there will be a levy of cess at the rate of 12% on sin and luxury goods. The peak rate of cess will be 15%. The amount garnered through cess will be used for compensating states during implementation of GST for the initial five years.